A Shifting Landscape: India's Green Energy Dreams Confront Policy Twists, Placing 12 GW of Projects in Limbo

India's ambitious journey towards a sustainable future is currently navigating turbulent waters, as a significant policy shift threatens to destabilize up to 12 gigawatts (GW) of renewable energy projects. This colossal capacity, equivalent to powering millions of homes, now hangs precariously in the balance due to changes in the Approved List of Models and Manufacturers (ALMM) norms for solar cells, casting a shadow of uncertainty over billions in investment and the nation's green energy targets.

At the heart of this predicament is a crucial decision by the Ministry of New and Renewable Energy (MNRE) to extend the implementation deadline for ALMM norms for solar cells by an additional year, pushing it from April 1, 2024, to April 1, 2025.

While seemingly a minor tweak, this extension has created a complex policy paradox, entrapping projects that were bid under specific regulatory assumptions.

The ALMM, introduced to foster domestic manufacturing and reduce reliance on imports, mandates that all government-supported and government-subsidized projects, as well as those under government schemes and programmes, must procure solar modules and cells from an approved list of manufacturers.

Modules came under ALMM in April 2021, while cells were slated to follow in April 2024. However, in March 2023, the government provided a temporary waiver from ALMM for two years (until March 31, 2024), offering a brief respite for developers grappling with supply chain issues and high costs.

The current crisis largely impacts projects that were bid before this two-year waiver (i.e., before March 31, 2023), but after the ALMM for modules was already in effect (April 2021).

These developers, having planned their projects with the expectation that they could import solar cells freely until April 2024, now face an unexpected hurdle. With the cell ALMM deadline pushed to April 2025, they find themselves in a regulatory limbo, unable to proceed without clarity on sourcing.

The core issue revolves around the crucial demand from developers for a 'grandfathering' clause.

They argue that projects bid before the March 2023 exemption and before the original cell ALMM deadline of April 2024 should be allowed to use non-ALMM compliant cells for a defined period. Without this, these projects would be forced to use domestically manufactured cells – a move that could significantly inflate costs due to higher prices and import duties on essential raw materials for domestic manufacturers.

This directly translates to increased tariffs for consumers and potentially renders many projects financially unviable.

Major players in India's renewable energy landscape, including industry giants like Adani Green Energy, Avaada Group, NTPC, NHPC, and SJVN, are among those whose projects are now facing this acute uncertainty.

The collective capacity affected underscores the severe implications for India's aggressive renewable energy targets, which aim for 500 GW of non-fossil fuel capacity by 2030.

The industry is holding its breath, awaiting a definitive resolution from the MNRE. A clear policy directive, ideally incorporating a grandfathering clause, is essential to unlock these stalled projects, protect significant investments, and maintain the momentum of India's green energy transition.

Without timely intervention, the nation's journey towards a sustainable future could face considerable delays and escalating costs, impacting both the economy and the environment.